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Economy and Finance

Economic forecast for Netherlands

The latest macroeconomic forecast for Netherlands. 

Indicators 2023 2024 2025
GDP growth (%. yoy) 0.2 0.4 1.6
Inflation (%. yoy) 4.1 2.6 2.0

The Dutch economy slowed down markedly in 2023, with GDP contracting over the first three quarters of the year. The impact of high inflation rates on households’ disposable incomes resulted in a significant decrease in private consumption spending. At the same time, export volumes decreased due to a slowdown in economic activity in the Netherlands’ main trading partners. Investment proved to be volatile, with a still robust first half of the year, but with businesses cutting back on investment spending in the third quarter. Annual growth in 2023 is estimated at 0.2%, a downward revision compared to the Autumn 2023 Forecast.

Private consumption is set to recover somewhat in 2024, as real wages pick up due to decreasing inflation rates and strong nominal wage growth. Furthermore, growth in 2024 is expected to be supported by increased government investment spending. Private investment is set to remain weak due to labour shortages and businesses continuing to adjust to the tightening of financial conditions that took place in 2023. Overall, growth in 2024 is forecast at 0.4%, revised significantly downwards compared to the Autumn Forecast. This can be explained by a more substantial negative carry-over effect into 2024 due to a downward revision of growth in the first three quarters of 2023. Growth is projected to pick up to 1.6% in 2025, broadly unchanged compared to autumn, on the back of a further recovery in private consumption and an improved outlook for trade and investment.

HICP inflation came down significantly during 2023, from 7.2% in the first quarter to 0.4% in the fourth quarter. The exceptionally low inflation in the fourth quarter can mainly be attributed to a strong decrease in energy prices. In the beginning of 2024, headline inflation is set to bounce back to around 3%, as the year-on-year comparison for energy prices becomes less favourable. Inflation excluding energy and food prices is forecast to continue gradually easing throughout 2024 and 2025, as strong wage growth prevents a steeper drop in inflation rates. Overall, HICP inflation is forecast at 2.6% in 2024 and 2.0% in 2025, which represents a strong downward revision for 2024, while the forecast for 2025 remains unchanged from autumn.